U.S. News

NYC may lose 165,000 jobs, double July's estimate

A man protests outside the New York Stock Exchange October 13, 2008. REUTERS/Shannon Stapleton

NEW YORK (Reuters) - New York City’s economy could lose 165,000 jobs in the next 24 months, almost double the estimate made in July, city Comptroller William Thompson said on Tuesday.

Thompson, a Democrat, also increased his forecast for the number of securities industry workers who could be laid off to 35,000 from a prior estimate of 25,000.

“The differences reflect the spreading of the economic troubles to other industry sectors as the nation slips into a general recession,” he said in a statement.

Wall Street is the city’s most important industry, with each of its high-paying jobs helping support two to four workers in other sectors, from shops to law firms, economists say. The sector has been walloped by the global credit crunch, which led to the record bankruptcy of Lehman Brothers Holding Inc and the government rescue of insurance giant AIG.

The latest estimate by Thompson is gloomier than a late September prediction by state Comptroller Thomas DiNapoli, who estimated 40,000 securities industry workers would lose their jobs statewide, with most of the losses concentrated in New York City. About 89 percent of all securities jobs are in New York City, DiNapoli said.

Wall Street’s job force peaked at 200,300 in December 2000, just before the boom ended, according to the state Labor Department. The industry had about 181,000 workers as of July 2008, but it often takes months for lay-offs to show up in unemployment data because severance can last for months.

The securities sector employees only 5 percent of all city workers but pays 23 percent of all wages. This industry also pays about 10 percent of New York City’s tax revenues and 20 percent of the state’s tax collections, DiNapoli said.

Reporting by Joan Gralla in New York; Editing by Leslie Adler